11/9/21

 

8900.1 CHG 758

VOLUME 3  GENERAL TECHNICAL ADMINISTRATION

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CHAPTER 34  CHANGES TO CERTIFICATES OR OPERATING AUTHORITY

Section 1  Safety Assurance System: Mergers and/or Acquisitions of Operational Assets

3-3591    GENERAL.

A.    Purpose. This section provides guidance and a process to follow when:

    Two or more certificate holders merge operations; or

    A certificate holder acquires the operational assets of another certificate holder.

NOTE:  This section is designed primarily to cover mergers and/or acquisitions between certificate holders conducting Title 14 of the Code of Federal Regulations (14 CFR) part 121 operations. However, this guidance applies to other 14 CFR parts that are issued an Air Carrier, Operating, or Air Agency Certificate (e.g., 14 CFR parts 125 and 135). Principal Operations Inspectors (POI) should be aware that the current method used by the Federal Aviation Administration (FAA) to approve a certificate holder’s merger and/or acquisition process is through the issuance of operations specification (OpSpec) A502. This OpSpec is currently only available for parts 121 and 135 operations.

1)    When mergers and/or acquisitions occur, certificate holders will typically have substantial changes in management; turnover in personnel and reduction of workforce; labor disputes; rapid expansion; changes in fleet types; and changes in outsourcing. These changes resulting from a merger or acquisition require various levels of FAA coordination, approval, and/or acceptance before they are implemented. The following are examples of changes that could occur during mergers and/or acquisitions:

    Changes in operational control systems and philosophy.

    Changes in OpSpecs.

    Changes to approved programs that are part of the operational control system.

    Revisions to manuals containing procedures for conducting various operations, maintenance, and inspection programs.

    Revisions to training curricula and/or changes in employee qualification criteria for persons who will be conducting merged or new operations and/or programs.

2)    The successful merger and/or acquisition of certificate holders will depend on the effective coordination, communication, and commitment between the certificate holders and the FAA. Complete each phase of the merger/acquisition process in the respective order to ensure the smooth alignment of activities and processes. Every merger/acquisition submission must have a defined transition plan that contains timelines. The size and scope of the air carriers will determine the size of the transition plan.
3)    The certificate holder is responsible to consider the following factors and be aware that these factors have a direct influence on the FAA’s ability to effectively and timely fulfill its requirements concerning mergers/acquisitions:

    Complexity of the affected operations.

    Timely notification to the FAA.

    The FAA’s early understanding of the changes which will result from the merger or acquisition.

    The certificate holder’s comprehension of the actions to take to obtain FAA approval or acceptance of the consequent changes.

    The length of time and sequence to implement changes.

B.    Scope. Mergers/acquisitions have a significant effect on FAA resources and have visibility at the highest levels of the FAA. It is imperative to handle them efficiently and effectively, ensuring continued compliance with 14 CFR and safe operating practices.

1)    Mergers occur when two or more certificate holders merge operations.
2)    Acquisitions that occur when there is a transfer of significant amounts of operational assets, including equipment and/or personnel, are similar to mergers. This determination will be made on a case-by-case basis by the Safety Assurance (SA) office. Develop a transition plan the same way as a transition plan for a merger: however, when no parallel or fenced operations are taking place a transition plan may not be required.
3)    Acquisitions under part 135 that occur where there is nonsignificant amounts of operational assets, including equipment and/or personnel, may not require a transition plan or the issuance of OpSpec A502. This determination will be made on a case-by-case basis by the SA office.

NOTE:  Acquisition by holding companies (noncertificate holders), when the certificate holder continues to exist as an independent entity (subsidiary), is a type of acquisition that requires little, if any, FAA action. Usually, few operational changes are made and development of a transition plan is not necessary.

C.    Indepth Inspections. In complex mergers/acquisitions, or when extensive changes or integrations occur, principal inspectors (PI) should consider requesting an indepth inspection of the surviving certificate holder’s operation (see paragraph 3-3594, Task Outcomes). PIs should normally plan an indepth inspection toward the end, or after completion, of the transition period.

3-3592    TASK PREREQUISITES AND SIGNIFICANT INTERFACES.

A.    Department of Transportation (DOT) Economic Authority Considerations. The air carrier is responsible for determining whether or not it will need to modify its existing DOT economic authority by virtue of receiving the single operating certificate (SOC) with different operating authority (e.g., domestic versus flag). In some cases, the answer will be “no” if the air carrier previously obtained DOT approval for transfer of international and other route authorities to the surviving certificate. The PI must ensure all required authority has been given by the DOT before issuing any OpSpecs. Any questions involving this step should be addressed to the Office of the Chief Counsel (AGC).

B.    Department of Justice (DOJ) Approval. DOJ approval may be required for some mergers if antitrust laws are involved. It will be the responsibility of the surviving certificate holder to coordinate all of these issues with the DOJ.

C.    Significant Interfaces.

1)    A merger/acquisition requires effective coordination and communication between the FAA and each certificate holder involved. Each certificate holder is responsible for designating its personnel who will be involved with the merger/acquisition process. The FAA will designate its appropriate personnel (e.g., managers, supervisors, and PIs) of the affected SA offices and Certificate Management Teams (CMT). The SA offices and CMTs will interface with the Air Transportation Division and the Aircraft Maintenance Division. A Joint Transition Team (JTT), if established (see subparagraph 3-3593A2)), should be set up early. If a JTT is established, the JTT Team Lead will interface directly with the Safety Standards (SS) divisions, and keep the appropriate SA division managers informed. Active communication between all stakeholders is paramount. During the merger/acquisition period, significant changes will take place. The JTT or the lead SA office (further discussed in subparagraph 3-3593A1)) will keep all affected personnel informed of the transition plans, along with the progress of the merger/acquisition process and any issues associated with that process.
2)    Certificate holders are responsible for the merger/acquisition process. The FAA understands that certificate holders may elect to utilize third-party consultants to play a role in the merger/acquisition process; however, the FAA will conduct communications directly with the certificate holder. The FAA will not communicate directly with the consultants.

D.    Additional Interface Considerations. Certificate holders who interface with international authorities should consider early coordination with those entities for meeting all International Civil Aviation Organization (ICAO) requirements (e.g., OpSpecs and call sign changes). Contact the appropriate International Field Office (IFO) or the International Program Division if necessary.

E.    References. None.

F.    Forms. Figure 3-130, Sample Joint Transition Team Charter.

G.    Job Aids:

    Figure 3-121, Merger and/or Acquisition Plan Process Flow.

    Figure 3-121A, Transition Plan Job Aid.

H.    Additional Guidance. For both parts 121 and 135 air carriers, the Safety Assurance System (SAS) assesses the safety of air carrier operating systems. The SAS Data Collection Tools (DCT) will be used to evaluate the design and performance of proposed merged systems during the merger/acquisition process. The SAS process and the Certificate Holder Evaluation Process (CHEP) provide means to identify hazards, analyze risk, and determine action in the course of air carrier mergers or acquisitions.

NOTE:  When the direction and guidance provided in this order does not adequately address a particular situation, the JTT Team Lead or the SA office manager will forward a request for additional guidance to the appropriate SS division.

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I.    Documentation Tracking. Each aviation safety inspector (ASI) who reviews submitted programs will document each activity via SAS Activity Recording (AR) code 1236, 3236, or 5236, as appropriate, after review and acceptance or approval of each submitted program. The CMT management will be responsible to ensure all tracking is timely and accurate. Air Carrier Certificates under SAS may elect to use the Action Item Tracking Tool (AITT) to document and track specific programs; however, the AITT does not replace the requirement to use SAS AR.

NOTE:  The JTT or CMT will be responsible for tracking all open/pending enforcement investigative reports (EIR) that have not left the office. Consult the FAA Enforcement Division (AGC-300) for guidance on how to combine all open/pending EIR cases and, if necessary, the Chief Council (AGC-1).

Figure 3-121.  Merger and/or Acquisition Plan Process Flow

Figure 3-121. Merger and/or Acquisition Plan Process Flow

NOTE:  The transition plan can be amended at any time during each phase, up to and including after SOC. For discussion on whether amending the transition plan requires an OpSpecs change and corresponding approval, see subparagraph 3-3593B1).

3-3593    PROCEDURES.

A.    Phase 1—Notification and Planning.

1)    Step 1—Notification from Certificate Holder and FAA Planning. Certificate holders involved in a merger/acquisition should notify the appropriate SA office, who will then notify the SA division manager. Upon notification and as early as possible, the affected SA office and their SA division manager should accomplish the following, as appropriate:
a)    When two or more SA offices are involved, the SA division managers will make a determination as to which one will be the lead office and where the principal base of operations will be located. At some point, the Flight Standards Service (FS) will decide which SA office will manage the certificate after the merger or completion of the acquisition. In making this determination, apply the considerations described in Volume 2, Chapter 1, Section 2 for assigning SA office responsibilities. If the SA office transfers responsibilities to another office, see Volume 10, Chapter 10, Section 1.
b)    Affected SA offices and assigned PIs will establish lines of communication. Once established, the SA office and PIs should maintain this communication throughout the transition period to provide an ongoing dialogue between assigned PIs, SA offices, and the SA division managers. If a JTT was established, they shall also be part of this ongoing communication. The SA office, the SA division manager, or the JTT (if established) shall periodically keep the Air Transportation Division and the Aircraft Maintenance Division informed of the status of mergers/acquisitions. The SA office manager will provide the Air Transportation Division with a point of contact (POC) for the merger/acquisition.
c)    The SA office and SA division managers will select/assign who will serve during the merger process. If the merger warrants a JTT, the SA office manager and the SA division manager will initiate its establishment. See Step 2 for additional JTT information.
2)    Step 2—JTT Formations and Expectations.
a)    The SA office manager, in coordination with the SA division manager, will contact the Air Transportation Division and/or the Aircraft Maintenance Division for help in determining if a JTT is necessary. The JTT should include representatives from all affected offices and should include all applicable specialties (Operations, Airworthiness, Dispatch, and Cabin Safety). The SA office managers and SA division managers will designate three transitional PIs (POI, Principal Maintenance Inspector (PMI), and Principal Avionics Inspector (PAI)) to serve during the merger/acquisition process. The transitional PIs should be members of the JTT and, whenever possible, the PIs of the surviving certificate holder. These transitional PIs will be responsible for determining the outcomes of program approvals, acceptance of certificate holder systems, manuals, and OpSpecs generation during the merger/acquisition process. If resources are lacking in the SA offices, expand the search for JTT members to include SS personnel. Consider having JTT members dedicated solely to the merger/acquisition process, depending on its complexity. Separate PIs (perhaps acting) should be assigned to the day-to-day management of each certificate.
b)    Conduct regularly scheduled JTT meetings throughout the entire merger/acquisition. The level of complexity of the merger/acquisition may necessitate the JTT meeting several times a week, with the certificate holders, the JTT members, or both. The JTT should regularly brief all the stakeholders, keeping inspectors and support staff informed on the progress.
3)    Requirements for the JTT After Establishment.
a)    The SA office managers will nominate a JTT Team Lead, whom the SA division management will designate. The Team Lead will be identified to SS and will serve as the main POC for all information regarding the merger/acquisition process.
b)    Develop a JTT guide and charter if applicable (see Figure 3-130).
c)    Open lines of communication between respective SA offices, SA division managers, and SS. Include the National Simulator Program Branch if applicable.
d)    Plan and conduct an initial meeting with the certificate holder.
e)    The JTT will coordinate and communicate with the CMT PIs on any changes in processes or procedures, which will directly affect the continuing oversight of each certificate holder prior to SOC.
f)    The JTT will use the respective CMT staff to assist in the various program review processes.
g)    The JTT will be responsible for the tracking and documentation of the day-to-day activities surrounding integration of the certificates.
h)    Along with a robust document tracking method for approval and acceptance of documents submitted, clerical assistance and automation support for the JTT is a requirement. The JTT may produce many certificate holder documents, as well as FAA documents, depending on the complexity of the merger/acquisition. The JTT should include all transition documents as well as all meeting minutes in the documentation process, and make them available to affected FAA stakeholders.
i)    In coordination with the CMT PIs, the JTT will consider the associated risk factors of the merger/acquisition changes that the certificate holder identifies as they are fully implemented. The use of SAS tools will help to ensure that each air carrier continues to operate at the highest level of safety.
j)    Should questions arise, JTT members will remain available until after the merger/acquisition is fully completed and all OpSpecs are combined without any references to parallel operations.
4)    Step 3—Establish FAA Resource Availability. The size and scope of the merger/acquisition of the certificate holder will be a consideration during formation of the JTT and the FAA resources that need to be available during the transition. Expertise outside of the SA office may be necessary. For the merger/acquisition of either part 121 or part 135 certificate holders, consider placing JTT and CMT members as a shared resource on each other’s SAS rosters. See Volume 10, Chapter 4. This will allow the team members the ability to conduct a Design Assessment (DA) and then enter that data into the respective database.
5)    Step 4—Initial Meeting.
a)    The FAA recommends that the certificate holders have a dedicated transition team similar to the FAA’s JTT. The recommendation is to have a team be comprised of personnel who have authority and responsibility to make decisions on operating practices for the respective certificate holders. Routine changes made in the normal course of certificate management can have a significant effect on the merger/acquisition of certificates.
b)    The lead SA office or the JTT will schedule an initial meeting for the certificate holder to brief the FAA of their proposed plans and for the FAA to brief the certificate holder’s key management personnel of the FAA requirements contained in this section. All PIs affected, their managers, and the entire JTT should attend. The intent of the initial meeting is to establish a good working relationship that will help the certificate holder to understand that aviation safety must not be compromised during the merger process and that an efficient and timely transition is predicated on their response to required changes or revisions. The SA office manager should ensure that the timing of this meeting is appropriate for the situation.
c)    The lead SA office manager should direct either the JTT or the assigned PIs to prepare for and conduct this initial meeting. Figure 3-121A should be useful in preparing for this briefing. During the briefing, ensure that the responsible parties will:

1.    Verify the information provided by the certificate holders. The information should include which certificate will survive; identification of the required management personnel in accordance with 14 CFR part 119, § 119.65 or § 119.69 as appropriate; and the location of certificate holder headquarters. If the certificate holders have changed their initial planning information to the extent that determination concerning SA office assignment is questionable, immediately notify the SA division manager.

2.    Verify that all stakeholders understand that until the merger is complete, all approvals and/or acceptance within the individual CMTs will filter through the JTT to ensure any changes will not have ramifications on the merger process. Each certificate holder must follow their current processes until each new process has been approved or accepted.

3.    Ensure the certificate holders understand that if they apply for exemptions that information will be communicated to the JTT.

4.    Inform the certificate holders of the requirement to submit a transition plan that will outline the transition that will occur throughout the merger/acquisition process. The size and scope of the operation will determine the complexity of the plan.

5.    Inform the certificate holders that the FAA recognizes modifications to the transition plan and estimated schedules will often be necessary. Therefore, appropriate notification of these changes will be essential, and the FAA will attempt to respond appropriately. The certificate holder should submit the transition plan to the JTT or SA office (if no JTT exists) as soon as possible so that the FAA may begin planning its activities.

6.    Encourage the certificate holders to consult with either the JTT or the PIs during development of the transition plan. Any amendment to the transition plan will require acceptance of the amended plan, and reissuance of OpSpec A502 may be required if significant events or changes occur.

7.    Inform the certificate holders of the FAA’s merger guidance contained in this section and provide them with the information that a transition plan should include.

8.    Inform the certificate holders to prepare a new compliance statement for the merged entity. This will identify how the merged certificate will maintain compliance with the CFR, as well as ensuring the certificate holder’s manuals contain the appropriate regulatory references.

B.    Phase 2—Transition Plan Review and Issuance of OpSpec A502 for Air Carriers.

1)    Transition Plan.
a)    One of the most important early steps in a merger/acquisition process will be the certificate holder’s submission of a transition plan. A transition plan must be submitted for air carriers. The regulatory authority for this requirement is part 119 subpart C, which specifies the findings that need to be made in order to issue an SOC. The size and complexity of the transition will depend on the size and scope of the certificate holders that are undergoing the merger/acquisition. The plan should identify those programs that require FAA approval or acceptance. FAA acceptance of a merger/acquisition transition plan ultimately occurs at the SA office, which will have oversight responsibility of the surviving certificate holder in the merger/acquisition. Upon acceptance of the certificate holder’s transition plan, the SA office shall forward a copy of the transition plan to the Air Transportation Division and the Aircraft Maintenance Division, along with a copy of the certificate holder’s proposed OpSpec A502. The Air Transportation Division must approve the issuance of OpSpec A502 in coordination with the Aircraft Maintenance Division. Once the Air Transportation Division and the Aircraft Maintenance Division have approved issuance of OpSpec A502, the PIs will issue OpSpec A502 to each certificate holder involved in the merger/acquisition. The issuance of OpSpec A502 to each certificate holder involved is a means of authorizing the plans for the transition during the merger/acquisition process.
b)    The transition plan is very dynamic and the SA office accepts any normally occurring changes to the transition plan with no reissuance of OpSpec A502. However, any significant revisions to the transition plan will require reissuance of OpSpec A502, which the Air Transportation Division must approve in coordination with the Aircraft Maintenance Division.
c)    The kind of information outlined in OpSpec A502 is dependent on the type and complexity of the situation. For additional information regarding OpSpec A502, see Volume 3, Chapter 18, Section 3, OpSpec A502. The JTT or PIs must review the transition plan in detail during this phase and consider the availability and capability of resources, making sure plans and schedules develop accordingly. To be responsive to the certificate holder’s needs, inspectors will need to conduct timely evaluations of the changes outlined in the transition plan. The FAA should carefully consider the feasibility of the plan.
d)    The transition plan must:

1.    Ensure the certificate holder continually identifies hazards and manages the risk associated with the merger/acquisition changes as these changes occur. Encourage the certificate holders to use a Safety Risk Management (SRM) process, as it will be beneficial. For the certificate holders that are required to use the SRM process, make sure they identify when and how they plan to use SRM.

2.    Contain a Schedule of Events (SOE) or timeline. Many events and activities outlined in the transition plan will occur before other events or activities. The transition plan should not contain open-ended events or activities. It should include a timeline for the completion of the transition period, when all changes resulting from the merger/acquisition are due to be complete.

3.    Outline the methods or procedures to be used to ensure continued compliance with 14 CFR and safe operating practices. For example, previously approved minimum equipment lists (MEL) based on specified maintenance and operations procedures should continue to be used until the new or revised MEL is approved.

4.    Be designed to ensure that changes to major programs are not submitted at the end of the transition. Submitting multiple programs to the FAA toward the end of the plan may delay acceptance and approval.

5.    Below are some items to consider within a transition plan. Some of these items are part 121 air carrier-specific.

a.    A general discussion of:

    Operational control during and after SOC.

    Manual systems and how they will be identified and cataloged.

    The method of combining two Safety Management System (SMS) programs and how the SMS will be utilized during the merger activities (if applicable).

    Proving/validation flights and/or ditching/emergency evacuations plans (submit early for resource planning).

    Any change in authority to conduct a kind of operation. For example, flag versus domestic, domestic versus supplemental, or commuter versus on-demand. (See the following NOTE for more information.)

NOTE:  The DOT grants only economic authority; it does not grant operational authority to conduct a kind of operation. In order to obtain authority to conduct a particular kind of operation (i.e., domestic, flag, supplemental, commuter, or on-demand), § 119.33 requires certificate holders, in certain circumstances, to conduct proving tests.

b.    Approved or accepted items and programs, and identify how those will change. These programs include, but are not limited to:

    Training programs, including those for flight and in-flight crewmembers, dispatchers and operational control, maintenance, ground, and customer service personnel;

    Continuous Airworthiness Maintenance Programs (CAMP);

    MELs;

    Airworthiness Directive (AD) programs;

    Alternative methods of compliance (AMOC) for ADs (submit these as early as possible; they may require coordination with the responsible Aircraft Certification Service office);

    Supplemental Type Certificates (STC) (may require coordination with the responsible Aircraft Certification Service office);

    Special airports;

    Environment assessment considerations, if new aircraft are added to OpSpec C070;

    Extended Operations (ETOPS);

    Fatigue Risk Management Plans (FRMP);

    Recordkeeping;

    The Pilot Records Improvement Act of 1996 (PRIA) (refer to Advisory Circular (AC) 120-68, Pilot Records Improvement Act of 1996, and FAA Order 8000.88, PRIA Guidance for FAA Inspectors);

    Carry-on baggage programs;

    Exit seating programs;

    Drug and alcohol testing;

    Security programs, to include access to the flight deck;

    Hazardous materials (HAZMAT) programs;

    OpSpecs—side-by-side comparison of OpSpec A004;

    Emergency Airworthiness Directive (EAD) notifications;

    Driftdown procedures;

    Category (CAT) II approaches and CAT III approaches;

    Reduced Vertical Separation Minimums (RVSM);

    Weight and Balance (W&B) programs;

    Ground deicing/anti-icing programs;

    Fueling;

    Aircraft parts consolidation;

    Test equipment consolidation; and

    Exemptions and deviations.

NOTE:  Figure 3-121A provides a transition plan job aid for inspector use.

2)    General Information on Transition Plans.
a)    Transition plans must outline the strategy and include benchmarks or target dates for bringing the various processes together prior to SOC. A parallel operation is when air carriers can be managed as a single entity from both the organizational and managerial perspectives, even though certain departments, equipment, and/or processes may be run independently. If the certificate holder’s operational areas will remain separate and operate parallel after SOC, it will be essential that the transition plan establish which processes will remain separate. The transition plan will include identified parallel processes and provide a schedule for merging these parallel processes after SOC. Parallel operations will create higher risk, so if the certificate holder elects to have separate processes at SOC then it will be important for the FAA to give careful scrutiny of those areas with increased surveillance. The FAA and the air carrier will give careful consideration to the OpSpecs and how to identify separate processes within the affected OpSpecs. More information on OpSpecs relating to this topic is in subparagraph 3-3593E, Phase 5—Approvals or Denials of Various Demonstrations or Submitted Documents.
b)    If the certificate holder elects to run parallel operations after SOC, they must address the following items for each of these parallel operations. This will be necessary in order to ensure the certificate holder is properly and adequately equipped as well as able to conduct a safe operation.

    Descriptions of the parallel processes.

    Reasons for the parallel processes.

    Who is affected by the parallel processes.

NOTE:  The JTT will review these items. Should a JTT not exist, the CMT will conduct the review, as they hold the ultimate responsibility for the acceptance of the transition plan.

c)    The parallel process shall also include descriptions of the controls ensuring the parallel processes are followed. A Custom DCT (C DCT) (a SAS tool) could be helpful for the merger team to assess these required processes used by the certificate holder.
d)    At the point of SOC, the airline will operate as a single entity from both organizational and management perspectives even though some departments may be running parallel operations under a single entity. Equally important for SOC is operational control; this must be done under one entity. Fenced operations must be clearly described in the appropriate OpSpec with SS approval before issuance. For more information on issuing those OpSpecs, see subparagraph 3-3593E.
3)    Return of Transition Plan.
a)    If significant deficiencies, omissions, or impractical proposals exist, the PIs should meet with the controlling certificate holder’s management and attempt to resolve these problem areas. Return the transition plan if the PIs and SA office managers cannot resolve these problems to the satisfaction of the FAA with a letter briefly describing the unsatisfactory areas. The SA office will retain a copy of this letter along with a copy of the returned transition plan.
b)    The PI will not issue OpSpec A502 for air carriers if an SA office returns a transition plan because it does not ensure continued regulatory compliance, or if the certificate holder refuses to develop and submit a plan. Should the certificate holders continue with the merger and or acquisition process despite the rejection of the transition plan, the SA office should increase surveillance if necessary, with the option of requesting an indepth inspection such as a CHEP, and deny any certificate amendments under § 119.41(c).
4)    Issue OpSpec A502. When the SA office finds the transition plan acceptable, the PIs will ensure a draft OpSpec A502 is prepared and send it to the Air Transportation Division and Aircraft Maintenance Division for approval (OpSpec A502 is a nonstandard authorization). PIs will review Volume 3, Chapter 18, Section 2, paragraphs 3-712 and 3-713, for information on how to obtain SS approval to issue nonstandard OpSpec authorizations. In addition, PIs will review Volume 3, Chapter 18, Section 3, OpSpec A502, which contains specific guidance on how to issue OpSpec A502. OpSpec A502 will remain in place until the merger/acquisition is 100 percent complete. Revisions to transition plans will likely necessitate updates, unless they are minor, to OpSpec A502. A revision to a transition plan could occur before or after SOC. (See the dotted lines in the process flow map in Figure 3-121.) PIs will update OpSpec A502 as necessary. Each update to OpSpec A502 requires SS coordination and approval prior to issuance. Once the final compliance statement is complete and the merger is 100 percent complete, OpSpec A502 will no longer be required and PIs must archive it in the Web-based Operations Safety System (WebOPSS).

C.    Phase 3—Review of Programs Submitted.

1)    Program Changes. As the certificate holder implements program changes, that certificate holder must evaluate the changes in the same manner as a certification process. The JTT will be the clearinghouse for all documents and will communicate on a regular basis with all parties involved. If the SA office receives documents containing program changes, the SA office will forward the documents to the JTT if appropriate. The certificate holders that are SMS-compliant shall also make available documentation showing that an SRM was completed for each process, procedure, or system (required by 14 CFR part 5). Some of the day-to-day operations of a certificate holder are governed by “accepted manuals.” This accepted material will have to be reviewed prior to implementation. Upon completion of the review process for all submissions, the JTT will make recommendations for approval, acceptance, or review of program changes that affect the current certificate status to the current respective PIs. If designated transitional PIs exist, they will be charged with determining outcomes of program approvals, acknowledgements, or acceptance of carrier systems, manuals, and OpSpecs during the merger process. The protocol for the resolution of any merger/acquisition activities or changes that are in question between/within the JTT, the PIs, or the certificate holders will be brought to the attention of the JTT Team Lead, to the respective office managers, and, if necessary, the SA division manager. The CMTs are responsible for the continued day-to-day oversight of the certificates throughout the merger process.
2)    OpSpecs Preparation for SOC. The Technical Programs Branch offers assistance to the PIs and the JTT in preparing OpSpecs for SOC. The process involves creating a replica of the data from the merging certificates to facilitate preparation of OpSpecs for the combined operation at SOC without affecting the existing OpSpecs. To request the creation of a replica or “ghost” certificate for drafting merged OpSpecs, contact the Technical Programs Branch directly or through WebOPSS support at AFS-WebOPSS@faa.gov at the beginning of the merger process. Provide the following information:

    Target dates for SOC and the issuance of new OpSpecs.

    The designator codes of the certificates involved and the surviving certificate.

    The office that will manage the merged certificate.

    The operator data (e.g., aircraft, addresses, personnel, authorized areas, and airports) to be transferred from the merging certificates.

    The list of FAA and industry users requiring access to the ghost certificate, including names, user identifications, and email addresses.

NOTE:  The ghost certificate process is designed to facilitate drafting OpSpecs for SOC, but planning and communication with the Technical Programs Branch is crucial to a successful transition.

3)    Two Names on One Certificate.
a)    Certificate holders desiring to list the names of more than one certificate holder involved in a merger or acquisition on the Air Carrier Certificate may only do so for a limited period of time prior to completion of the merger/acquisition, and then only with the permission from AGC. The JTT (or SA division manager if there is no JTT) will review requests of this nature. If the JTT/SA division manager concurs with the request, he or she will forward it to AGC through the manager of the Air Transportation Division.

NOTE:  In accordance with § 119.9, all aircraft must be marked with a name or certificate number listed on the Air Carrier Certificate. Getting approval to have more than one name on the certificate is one way to meet that requirement; placing a placard on the airplane and using a doing business as (DBA) name found in OpSpec A001 is another method to satisfy this requirement.

b)    The surviving certificate number (certificate designator followed by four additional characters, e.g., TWRA118A) identifies the surviving certificate holder regardless of the surviving name chosen.
4)    Exemptions and Deviations.
a)    The certificate holders submit petitions for exemptions in accordance with 14 CFR part 11. This process may take a considerable length of time and may be further delayed if the exemption is published in the Federal Register (FR) for public comment. The FAA recommends the certificate holder submit the petition for exemption immediately after submitting the transition plan to help expedite the process. See Volume 3, Chapter 2, Section 1 for guidance on the exemption process. Exemption approvals or denials could affect the resources needed.
b)    Examine the deviations and exemptions that each certificate holder has and encourage the certificate holder to combine them if possible, prior to SOC. If the deviations and exemptions are not combined prior to SOC make sure OpSpec A005 clearly reflects this.
5)    Training Program Considerations. For approved training programs/curricula, confirm there are clear parameters of what information may be disseminated by bulletins, distance learning, and conventional training. Establish parameters for appropriate methods for delivering training. The training delivery mechanism should support the learning objectives; examples may include bulletins, distance learning, and conventional training. Volume 3, Chapter 19, Section 9 provides guidance on training difference levels. In an Advanced Qualification Program (AQP), the Implementation and Operations Plan (I&O Plan), curriculum development methodology, and qualification standards prologue should support the curriculum development and media selection.
a)    Initial New-Hire Training. Initial new-hire training is required when transferring crewmembers and dispatchers onto a certificate. Initial new-hire training may be reduced if it can be determined that training requirements have already been met. The certificate holder may accomplish a gap analysis or Entry Level Analysis (applicable to AQP) to support the reduction of this training.
b)    AQP Programs. There are no changes in the review and approval processes for AQP revisions. It may be appropriate for the JTT to participate on the Extended Review Team (ERT) for merger‑related revisions. JTT involvement in all AQP revision reviews, including those that are non‑merger‑related, may become overly burdensome on the JTT and produce unacceptable time delays, and therefore is not recommended. The JTT should coordinate desired ERT participation needs early in the merger process. If the JTT is functioning as a document tracking gateway during the merger, it is recommended that AQP revisions be submitted simultaneously to the ERT so as to not slow down the review process.
c)    Flight Simulation Training Devices (FSTD). If FSTDs are used in the operator’s FAA‑approved flight training program, the operator must notify the National Simulator Program Branch of intent to move any FSTDs and submit changes to the operator’s FSTD Simulation Quality Management System (SQMS) program and FSTD sponsorship, in accordance with 14 CFR part 60.
6)    Aviation Safety Action Program (ASAP) Considerations. The controlling factor behind ASAP is the Memorandum of Understanding (MOU), which will be the consolidation of employee group representation and most likely will not have any connection with SOC. Separate MOUs and event review committees (ERC) could very likely be maintained after SOC until employee representation consolidation and signature on a new MOU has occurred. The SA offices should notify the Air Carrier Training Systems and Voluntary Safety Programs Branch of key ASAP personnel changes as soon as they occur.
a)    ASAP Before SOC. During the merger period, each CMT will continue to support the respective ERCs in normal fashion. When a revised MOU is signed prior to SOC, and the employee group has one representation entity, then one CMT will fulfill the necessary requirements to support a single ERC. The quarterly report submission requirements will be satisfied using the final certificate designator.
b)    ASAP After SOC. In the case where there are two separate ERCs after SOC, the SA office will need to support two ERCs. Contact the Air Carrier Training Systems and Voluntary Safety Programs Branch regarding the quarterly report submission requirements and the naming convention for one certificate with two ASAP MOUs in place.
7)    Voluntary Disclosure Reporting Program (VDRP) Considerations.
a)    The certificate management office (CMO) or JTT will notify the Air Transportation Division of the pending merger and provide at least the following information:

    Names and four-letter identifiers for the merger participants.

    Name and identifier after SOC.

    CMO assigned.

    Target date for SOC.

    Contact information for key members of the JTT.

b)    Actions taken by SA office with the terminating certificate:

1.    Assess any open voluntary disclosures to determine which, if any, are potentially applicable to the surviving air carrier.

2.    Take action as necessary to close all open voluntary disclosures which are not applicable to the surviving air carrier (complete or rescind each case).

3.    Coordinate with JTT to assure that known deficiencies (as identified in voluntary disclosures which have not yet been completed) are not carried forward into the surviving certificate holder’s programs, policies, procedures, or equipment.

NOTE:  Close all open VDRP cases (rescind or complete) prior to termination of the associated Operating Certificate. If a certificate is terminated with open voluntary disclosures, those disclosures will remain open indefinitely and will not be available for edit or closure. All VDRP files will be locked when the certificate is terminated in WebOPSS.

c)    Actions by the SA office assigned the certificate:

1.    Update WebOPSS data for the certificate to reflect the PIs assigned to the certificate following the merger.

2.    Assure all inspectors assigned to the surviving CMO/CMT are entered into the VDRP user database as needed to meet the responsibilities of their positions.

NOTE:  A PI or other inspector who has the authority to add new users to the VDRP system for that specific certificate holder must accomplish the addition of new users to the VDRP system. The VDRP system recognizes PIs by reference to the appropriate fields in WebOPSS. In order for a PI to add other inspectors to the VDRP system, the PI must be assigned to that certificate as documented in WebOPSS. Procedures for adding a new user to the VDRP system are available in the VDRP User Guide under “Add New User.” The VDRP User Guide may be downloaded from https://av-info.faa.gov/vdrp/userguide.pdf.

8)    Integration of Other Voluntary Safety Programs. There could be other voluntary programs that will need to be combined, such as flight operations quality assurance (FOQA), Line Operations Safety Audit (LOSA), or Internal Evaluation Programs (IEP). Contact the Air Carrier Training Systems and Voluntary Safety Programs Branch for guidance if needed.
9)    AMOC/STC Considerations. The certificate holder should address these items early within their merger process as it could take time to fully research information with the responsible Aircraft Certification Service office.
10)    Constraints. Delays may impact the approval of any merger/acquisition changes and final issuance of the SOC in any phase of this process. Each documented merger/acquisition process or procedure must be complete and in accordance with applicable parts of the CFR at the time of its presentation to the FAA. Once the FAA reviews and recommends the document, process, or procedure for approval/acceptance by the FAA, the certificate holders cannot change or revise that particular document, process, or procedure unless agreed upon by the lead office. Changes to documents, processes, and procedures may be required after the FAA’s initial review and recommendation. To ensure amendments do not compromise the approval or acceptability of the original document, processes, or procedures already reviewed, the FAA must review all subsequent changes.
11)    Notification of Acceptance or Approval. For notification of acceptance or approval, see Volume 3, Chapter 1, Section 1.

D.    Phase 4—Demonstrations and Inspections.

1)    Planning and Preparation. Plan for and conduct demonstrations and inspections, if required, in the same manner as Phase 4 performance assessment of a certification process (see Volume 2, Chapter 3 for part 121 air carriers, and Volume 2 for other 14 CFR parts). The certificate holder must build time into the plan to allow for completion of a demonstration phase. Many of these demonstrations and inspections will require appropriate FAA resources. Make sure the certificate holder plans accordingly.
2)    Types of Demonstrations and Inspections. Consider the following if applicable to the operations:
a)    Ditching and/or Emergency Evacuations. If the certificate holder adds different/new types of aircraft to the surviving certificate, a demonstration of emergency evacuation or ditching may be required. If the air carrier plans to petition for exemption for part 121, § 121.291, the air carrier should submit the petition early. See Volume 3, Chapter 2, Section 1 for exemption guidance.
b)    Aircraft Conformity Evaluation. For air carriers, the PMI, or JTT if one exists, shall consider the need and scope of the conformity evaluation. See Volume 2, Chapter 3, Section 4 for additional information.
c)    Tabletop Exercises. Tabletop exercises are not required. However, they are beneficial in making sure the operations, procedures, and controls are in place and ready before resources are utilized from either the certificate holder or the FAA.
d)    Proving and/or Validation Tests. Proving tests and/or validation flights are required when the provisions of §§ 119.33(c) and 121.163 and part 135, § 135.145 are met. If the merger/acquisition under part 121 is authorizing the surviving certificate to operate new types of aircraft and/or new kinds of operations (such as domestic, flag, or supplemental), proving tests must be completed. If the authorization to conduct operations over proposed routes or areas in compliance with regulatory requirements (e.g., operations outside U.S. airspace, Class II navigation authorizations, CAT II/III, or ETOPS) were not previously granted in the surviving certificate holders’ OpSpecs, validation tests may be required. The main purpose of the proving/validation test is to ensure the safety of all operations that will be conducted after the closing of the merger/acquisition transaction. If the certificate holder plans to petition for deviation or exemption from any rule requiring proving or validation tests, that petition should be submitted early. See Volume 3, Chapter 29 for additional information on proving and validation tests.

NOTE:  Consider using the Safety Analysis and Promotion Division as a resource if needed for any of the above tasks. The first priority will be to use currently assigned inspectors who are intimately familiar with the operations.

NOTE:  The regulatory preamble from December 20, 1995 states, “The primary focus of proving flights is not simply to test the proficiency of flight crewmembers but to test the company’s operational control procedures for the airplanes that will be operated.” The complexities of integrating and restructuring operations sometimes require air carriers to run separate or parallel operations under one SOC.

e)    Conditions for Conducting Proving Tests.

1.    If there are various operational control facilities, and more importantly various sets of procedures are still running in parallel, there is no value in doing proving tests until those parallel operations are integrated. Thus, there should be flexibility in terms of when to conduct the proving tests. Section 119.33(c) grants the FAA such flexibility, as it states, “all proving tests must be conducted in a manner acceptable to the Administrator.”

2.    In the interest of safety, the FAA should be flexible when assessing each transaction to determine and approve the best time to conduct the proving tests, which may occur before or after the issuance of the SOC. The flexibility facilitates the safe integration of merged operations and allows the FAA to conduct proving tests that simulate real post-merger/acquisition (end-state) operations. This allows the air carrier to conduct proving tests just prior to the operational control of the first airplane being moved into the surviving certificate.

f)    Planning the Proving Tests. The following conditions and limitations will be followed:

1.    The transition plan must outline a method to maintain clear separation between the two operations, with partitions in place. This could include maintenance personnel and facilities, ground personnel, crew schedulers, dispatchers, and other personnel.

2.    The Air Carrier Certificate holder must comply with all provisions of OpSpec A502.

3.    Any company personnel assigned to the operations of the airplane being moved into the surviving certificate holder’s operation must have successfully completed all required training before performing any operations using that airplane.

4.    Proving tests must be completed before the operational control of each airplane type is moved onto the surviving certificate holder’s operation.

5.    Once the airplane(s) has been moved over into the surviving certificate holder’s operation, it cannot be used on the previous certificate.

g)    Reduction of Proving Test Hours. FAA policy allows for a reduction of proving test hours based on the surviving air carrier’s experience and performance factors. The FAA assesses factors such as (but not limited to) similar types of operations, similar types of airplanes, and experience of airline and management personnel. Elements such as parallel expertise and other capabilities that normally arise in mergers/acquisitions may also determine whether a reduction in the proving test hour requirement is warranted. These determinations are made on a case-by-case basis, and no single factor will result in a guaranteed reduction of the requirement. For example, a certificate holder may request an exemption from all proving tests related to its merger. The petition for exemption could be denied if the petitioner does not show how an equivalent level of safety (ELOS) would be provided if proving tests were not conducted. For more information on proving tests and reductions, see Volume 3, Chapter 29.

E.    Phase 5—Approvals or Denials of Various Demonstrations or Submitted Documents.

1)    Procedures for Approvals or Denials. Use the same procedures used for approvals or denials for initial certification. Follow the guidance in Volume 3, Chapter 1, Section 1 for approval or denials of submitted documents.
a)    Accept programs that are not OpSpec-related or require specific approval.
b)    Approve those programs requiring approval.
c)    Generate appropriate OpSpecs as applicable.
2)    OpSpec Considerations. All 300-series and nonstandard 500-series OpSpecs/management specifications (MSpecs)/training specifications (TSpecs) (parts A, B, C, D, E, and H) require approval by the appropriate SS division.
a)    The Flight Technologies and Procedures Division and the Air Transportation Division or the General Aviation and Commercial Division must approve All Weather Operations relating to instrument procedures, as appropriate.
b)    The appropriate SS division must approve all nonstandard text added to an OpSpec/MSpec/TSpec. For detailed guidance on the process for nonstandard text and obtaining approval, see the guidance in Volume 3, Chapter 18, Section 2, paragraphs 3-712 and 3-713.
c)    Additionally, forward OpSpecs that annotate parallel or fenced operations after SOC to the appropriate SS division for approval. See subparagraph 3-3593E3)a) for more guidance relating to OpSpecs for these types of operations. When each OpSpec is completed and ready to be issued, forward them for review to the appropriate SS division. Please note that the OpSpecs do not have to be bundled and sent together; send the individual OpSpecs for review as they are completed.
3)    OpSpecs for Parallel Operations.
a)    OpSpecs are the legal documents by which the FAA authorizes air carriers to operate and delineates their operational requirements; therefore, the specifics of the parallel operations must be entered into the OpSpecs. Preferably, complete the main content of the OpSpecs describing the end state (e.g., the Carrier A method, the Carrier B method, or a new method). Then, in the nonstandard text box, specify whether that end state applies to both carriers immediately upon the completion of the merger. If there will be separate procedures used by the merged carriers, describe the procedures to be used in the nonstandard text box. OpSpec C052 is an example of an OpSpec where each side of the parallel operation may have different approaches authorized. If Carrier A had more types of approaches authorized in OpSpec C052, complete OpSpec C052 using Carrier A’s procedures and indicate which procedures Carrier B is not authorized to conduct in the nonstandard text box (e.g., “Carrier B not authorized Localizer back course (LOC BC)”). Another example is OpSpec C384: “ABC B737 only.”
b)    In some cases, primarily those where the OpSpec data is loaded from the “Maintain Operator Data” section of WebOPSS, the main content of the OpSpec does not accommodate a way to distinguish which carrier is authorized which portions of the authorization. One is OpSpec C070. It is not possible in the Airports Authorized for Scheduled Operations table in OpSpec C070 to identify the airports where each certificate holder can dispatch. To get around this limitation, export the content of the OpSpec C070 table from WebOPSS to a spreadsheet and add columns to the exported airport data to distinguish the differences in the fenced operations. The OpSpec C070 table data can be exported from “Maintain Operator Data—Airports” by using the “Export Assigned Airports Data” function in WebOPSS, or by copying the table from OpSpec C070 and pasting it into a spreadsheet. The spreadsheet file must be controlled with a revision number and updated each time any of the information changes. In the nonstandard text box for OpSpec C070, record and maintain the file name, revision number, and change date each time the external file and/or OpSpec C070 is amended.
c)    The authorized areas information in OpSpec B050 is also loaded from “Maintain Operator Data” in WebOPSS. For OpSpec B050, record differences in authorized areas for fenced/parallel operations using the authorized areas “Notes” feature in WebOPSS, found under “Maintain Operator Data—Authorized Areas—Add/Remove Territories.” Enter as many notes as necessary to describe the differences in the fenced operations and then assign those notes to the appropriate authorized areas (e.g., Note Number 5 may be entered as “Carrier A Only” and then assigned to all of the areas to which Carrier A is authorized but not Carrier B).
d)    For OpSpec D085, use the “Nose Number” column under “Maintain Operator Data—Aircraft,” to indicate which side of the fence will handle maintenance and dispatch for the aircraft (e.g., add “Carrier A” or “Carrier B” to the “Nose Number” column for each applicable N-numbered aircraft). Do not use the “Registration Number” or “Serial Number” columns for this purpose. Modifying the registration and/or serial numbers corrupts those numbers and prevents the ability to track or associate the aircraft by its true identifier.

F.    Phase 6—SOC Phase.

1)    Definition of SOC—SOC for Air Carriers. An SOC may be issued when one set of part 119 management personnel is in place and these managers have operational control of the entire organization. It is most desirable to have negotiated the merging of all operations and procedures throughout the merger period and prior to issuing an SOC. However, this is not required provided every OpSpec involved clearly shows differences between the different procedures conducted by the merging certificate holders. For example, if the certificate holder obtains an SOC before the merging certificate holders have negotiated a single deicing program, differences between the formerly separate programs must be spelled out. Merged certificate holders operating under an SOC without a complete merging of operating procedures will experience an increased risk due to the need to ensure employees are able to apply procedural differences. It is therefore advisable to minimize the number of OpSpec differences when approaching an SOC. Having parallel operations under one certificate also increases the workload for the FAA oversight offices. Because the certificate holder will be operating with two operational procedures in some cases, the resulting operation is more complex and therefore increased surveillance is warranted. As significant changes occur and those parallel operations merge, the transition plan must be amended and the appropriate OpSpecs, including OpSpec A502, must be amended.
2)    Final OpSpecs for an SOC. If using the ghost certificate for OpSpecs preparation, then at least 2 weeks out from the final SOC date, contact WebOPSS support at AFS-WebOPSS@faa.gov to coordinate the final data transfer in WebOPSS to the surviving certificate. WebOPSS requires a 48-hour period to transfer the data and draft OpSpecs from the ghost certificate to the surviving certificate, during which time there can be no activity in either certificate in WebOPSS. The draft OpSpecs must remain in “Draft: In process” status in the ghost certificate. Signed OpSpecs cannot be moved.
3)    Certificate Transfer. If the merger/acquisition process results in a certificate moving to a new location, see Volume 10, Chapter 10, Section 1. The referenced guidance is primarily designed for part 121 air carriers, but may provide some useful information to other 14 CFR part certificate holders.
4)    FAA Databases and Naming Conventions.
a)    One or both SA office designator(s) could change because of a merger/acquisition. Coordinate with the PIV Administrator, at 9-NATL-PIV@faa.gov, for new FAA employee user IDs. It is important that the surviving SA office or newly developed SA office start this process before the final phase.
b)    Ramp coordinators may need to know of the completed merger, as well as any other internal data coordinators. Consider other 14 CFR parts that could be affected.
5)    FAA Database Updates.
a)    Update enhanced Vital Information Database (eVID), check pilot and check flight engineer authorizations, and Aircrew Program Designee (APD) authorizations. For parts 121, 135, and 145 certificate holders, see Volume 10 for SAS guidance and update SAS Module 1, Configuration.
b)    Update OpSpec A502, if needed, to reflect changes after SOC. This will now become post‑SOC OpSpec A502 and will require amendments as parallel operations merge into one. Once all parallel operations are merged, OpSpec A502 will no longer be required and should be archived.

3-3594    TASK OUTCOMES.

A.    Final Considerations.

1)    Prepare a new certificate if applicable. The certificate holder will surrender the old certificate and old OpSpecs. Notify the Regulatory Support Division about the surrendered certificate or any administrative change, such as a change in the certificate number, if needed.
2)    The certificate holder will consider reregistration of aircraft and make necessary changes, if applicable.
3)    The CMT will create a risk-based surveillance program in accordance with Volume 10.

B.    Indepth Inspection. The CHEP, as described in Volume 10, Chapter 8, provides policies and procedures to evaluate parts 121, 135, and 145 air carriers/air agencies. At the completion of a merger/acquisition, the PIs should consider requesting a CHEP. Plan the CHEP towards the end, or after SOC. The results of the CHEP should indicate how effectively the transition plan was accomplished. It should also reveal any problem areas needing further attention.

NOTE:  Regardless of the complexity of the situation, at any time during the transition period, when continued compliance with 14 CFR or safe operating practices becomes questionable, the SA office should conduct an indepth inspection without delay.

3-3595    FUTURE ACTIVITIES. None.

Figure 3-121A.  Transition Plan Job Aid

TRANSITION PLAN

ITEM APPLY (Y/N)

DATE RECEIVED

DATE COMPLETED

BY WHOM

A.   Training Programs (Categories of Training) for Crewmembers and Dispatchers

 

 

 

 

1.   Initial New-Hire Training for Newly Hired Personnel

 

 

 

 

2.   Initial Equipment Training

 

 

 

 

3.   Transition Training

 

 

 

 

4.   Upgrade Training

 

 

 

 

5.   Differences Training

 

 

 

 

6.   Recurrent Training

 

 

 

 

7.   Requalification Training

 

 

 

 

8.   Instructor Training

 

 

 

 

9.   Check Pilot and Check Flight Engineer Training

 

 

 

 

10. Security Training

 

 

 

 

11. Hazardous Materials (HAZMAT) Training

 

 

 

 

B.   Training Programs for Maintenance Personnel

 

 

 

 

1.   Mechanic/Repairman

 

 

 

 

2.   Inspection Personnel/Required Inspection Items (RII)

 

 

 

 

3.   Ground Handling/Servicing

 

 

 

 

4.   Station Personnel

 

 

 

 

C.   Evaluate Applicable Manuals/ Documents

 

 

 

 

1.   Completed General Operations Manual (GOM)

 

 

 

 

2.   Completed General Maintenance Manual (GMM)

 

 

 

 

3.   Federal Aviation Administration (FAA)-Approved Aircraft Flight Manual (AFM)

 

 

 

 

4.   Company Aircraft Operations Manual

 

 

 

 

5.   Aircraft Checklists:

 

 

 

 

a.   Normal

 

 

 

 

b.   Abnormal

 

 

 

 

c.   Emergency

 

 

 

 

6.   Flight Attendant (F/A) Manual

 

 

 

 

7.   Dispatcher/Flight Following/Locating Manual

 

 

 

 

8.   Station Operations Manual

 

 

 

 

9.   Company Emergency Manual

 

 

 

 

10. Airport Data and En Route Manual (Charts and Plates)

 

 

 

 

11. Airport/Runway Analysis (Performance)

 

 

 

 

12. Ground Deicing/Anti-Icing

 

 

 

 

13. Minimum Equipment List (MEL)

 

 

 

 

14. Configuration Deviation List (CDL)

 

 

 

 

15. Maintenance Technical Manuals:

 

 

 

 

a.   Airframe/Powerplant

 

 

 

 

b.   Structural Repair Manual

 

 

 

 

c.   Parts Catalogue

 

 

 

 

d.   Inspection Procedures Manual (IPM)

 

 

 

 

e.   Manufacturer’s or Vendor’s Manual

 

 

 

 

f.   Wiring Manual

 

 

 

 

g.   Overhaul Manual

 

 

 

 

16. Fueling/Refueling/Defueling/Deicing

 

 

 

 

17. Weight and Balance (W&B) Control Procedures

 

 

 

 

18. Hazmat Program

 

 

 

 

19. Security Program

 

 

 

 

20. Reliability Program

 

 

 

 

21. Continuous Airworthiness Maintenance Program (CAMP)

 

 

 

 

22. Emergency Plan/Notification

 

 

 

 

23. Passenger Briefing Cards

 

 

 

 

24. Customer Service Training

 

 

 

 

25. Exit Seating Program

 

 

 

 

26. Carry-On Baggage Program

 

 

 

 

D.   Contracts/Leases/Agreements

 

 

 

 

1.   Training Contracts

 

 

 

 

2.   Maintenance Contracts/Agreements

 

 

 

 

3.   Aircraft Leases

 

 

 

 

4.   Weather/Communication Contracts

 

 

 

 

5.   Airport Analysis Contracts

 

 

 

 

6.   Exclusive-Use Agreements

 

 

 

 

E.   Other Documents/Programs

 

 

 

 

1.   Aircraft Conformity Inspection

 

 

 

 

2.   Main Operations Base

 

 

 

 

3.   Main Maintenance Base

 

 

 

 

4.   Line/Station Facilities

 

 

 

 

5.   Dispatch/Flight Following/Locating

 

 

 

 

6.   Recordkeeping Systems:

 

 

 

 

a.   Crewmember and Dispatcher:

 

 

 

 

(1) Training

 

 

 

 

(2) Flight Time, Duty Periods, and Rest

 

 

 

 

(3) Qualification

 

 

 

 

b.   Maintenance:

 

 

 

 

(1) Aircraft Records

 

 

 

 

(2) Personnel Training

 

 

 

 

c.   Flight/Trip Records

 

 

 

 

7.   Emergency Evacuation Systems (EES)/Ditching Demonstration Plan

 

 

 

 

8.   Proving/Validation Test Plan

 

 

 

 

9.   Operations Specification (OpSpec)

 

 

 

 

10. Management Personnel

 

 

 

 

11. Exemptions, Deviations, Waivers, Authorizations

 

 

 

 

Figure 3-130.  Sample Joint Transition Team Charter

Joint Transition Team (JTT) Objective:

The primary stakeholder for the final product of a merger/acquisition is the flying public. Hence, a JTT in collaboration with the respective certificate management office (CMO) is committed to the complete oversight of the processes and procedures which will ensure the continuing safe operations of both airlines during and including the final merger/acquisition of two or more carriers into a single operating certificate (SOC).

Project Objectives:

On (insert date), XYZ Airline announced, in a joint statement, their intention to merge with ABC Airline. Subsequently, on (insert date), XYZ and ABC presented an introductory outline of both carrier’s consolidation plans with the objective of securing a SOC by early [20XX]. Plans presented to the Associate Administrator for Aviation Safety (AVS-1) and the Executive Director of the Flight Standards Service on [insert date] outlined preliminary concepts describing how the carriers intended to incrementally integrate both air carriers and wholly incorporate their assets. Official submission of the carrier’s transition plan is expected by [insert date].

To address and resolve the challenges presented by this merger/acquisition, the Federal Aviation Administration (FAA) will establish a JTT. The JTT will consist of selected inspectors, to include all specialties as required, and be nominated by XYZ CMO and ABC CMO managers. A JTT Team Lead will be nominated by the CMO managers for designation by Safety Assurance (SA) division management. The Team Lead will:

    Be responsible for overall management of JTT team members and their functions.

    Assure that interested parties remain represented and their expertise effectively integrated at all task levels.

    Establish a reporting structure for all members of the JTT and coordinate all assignment of work.

    Serve as the point of contact (POC) for coordination with the FAA Safety Standards (SS) divisions.

The JTT will follow the guidance in FAA Order 8900.1, Volume 3, Chapter 34, Section 1, Safety Assurance System: Mergers and/or Acquisitions of Operational Assets. This order is the principal guidance in the review, coordination, and final recommendation for acceptance/approval of any transitional programs or processes presented by XYZ and ABC.

Once the FAA accepts a transition plan for the merger/acquisition, the CMO managers and SA division managers will designate three transition principal inspectors (PI) who will be charged with determining outcomes of program approvals and acknowledgements or acceptance of carrier systems, manuals, and operations specifications (OpSpecs) during the merger/acquisition process. These designated transitional PIs will be members of the JTT. These PIs may or may not continue to serve as the PIs once SOC is achieved. Associated agency guidance will help in gaining effective integration of the merger/acquisition air carriers’ management and operations.

The JTT Team Lead will interface with the appropriate SS division for coordination of the multiple approvals, policy determinations, and review of OpSpecs requiring:

    SS approval of various programs,

    SS approval of nonstandard text within OpSpecs, and

    Appropriate reference to any arrangements for post-SOC “partitioned” or “fenced” operations.

The JTT Team Lead will enlist Safety Analysis and Promotion Division expertise for assistance on interfacing existing Comprehensive Assessment Plans (CAP) and migrating these plans into an SOC Certificate Holder Operating Profile (CHOP). Concurrently, Safety Assurance System (SAS) system design and performance assessments at each CMO must remain in place without compromise.

Strategic Alignment:

The JTT recognizes that the primary responsibility for the daily and continuing oversight of the XYZ and ABC Operating Certificates remains with the XYZ CMO and ABC CMO, respectively. The JTT will be responsible for the day-to-day activities surrounding integration of the certificates. The two Certificate Management Teams (CMT) are responsible for the day-to-day oversight of the certificates, not the JTT.

The JTT will accomplish all merger/acquisition activities in accordance with Title 14 of the Code of Federal Regulations (14 CFR) and any published orders or guidance, as appropriate. The JTT will coordinate and communicate with the CMT PIs on any changes in processes or procedures, which will directly affect the continuing oversight of each certificate holder. This communication will promote an effective understanding of the changes and ensure consistency in the application of regulatory compliance and system safety at both certificate holders during the transition period.

The JTT will partner with XYZ CMT and ABC CMT staff to assist in the various program review processes. Upon completion of the review process, the JTT will make recommendations for approval, acceptance, or review of program changes that affect the current certificate status to the current respective CMT PIs. The JTT will provide the conduit through which all merger/acquisition changes/proposals are communicated from the individual certificate holders to the XYZ CMT and ABC CMT. Furthermore, the protocol for the resolution of any merger/acquisition activities or changes that are in question between/within the JTT, CMT PIs, or the certificate holders will be brought to the attention of the JTT Team Lead, then the respective SA office managers, and then through the normal chain.

Constraints:

The approval/acceptance of any merger/acquisition changes and final issuance of the SOC may be impacted by delays in any phase of this process. Each documented merger/acquisition process or procedure must be complete and in accordance with applicable parts of the Code of Federal Regulations (CFR) at the time of its presentation to the JTT. Once a document, process, or procedure is reviewed and recommended for approval/acceptance by the JTT, the certificate holders are not permitted to change or revise that particular document, process, or procedure unless agreed upon by the JTT. It is understood that changes to documents, processes, and procedures may be required after the JTT’s initial review and recommendation. However, subsequent proposed changes will be reviewed by the JTT to ensure the amendments do not compromise the approval or acceptability of the original document, process, or procedure.

Project Stakeholders:

XYZ Airline

ABC Airline

Charter Approval:

This charter authorizes the Team Lead named below to organize teams and direct resources consistent with the objectives stated above. I have reviewed and agree to the initiatives contained in this charter.

                                                                                                                                             

JTT Team Lead                                                                                  Date

                                                                                                                                             

SA Division Manager                                                                         Date

                                                                                                                                             

SA Division Manager                                                                         Date

                                                                                                                                             

Manager, XYZ CMO                                                                          Date

                                                                                                                                             

Manager, ABC CMO                                                                          Date

RESERVED. Paragraphs 3-3596 through 3-3610.